Premier Energies shares fall as analysts warn of near-term stock price pressure after Q3

Analysts tracking Premier Energies Ltd. expect the stock to see some pressure in the near-term after its third quarter earnings miss. The stock is down over 4% in early trading on Friday.

For the December quarter, Premier Energies missed Bloomberg consensus expectations across parameters. The company's 13% revenue growth from last year to ₹1,936 crore was lower than the estimate of ₹2,118.8 crore.

Premier Energies reported Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) of ₹592.7 crore, higher by 15.5% from the same quarter last year, but lower than the ₹626 crore estimate.

EBITDA margin expanded by around 60 basis points to 30.6% from 29.95% last year. The margin figure was slightly better than the estimates of 29.55%. However, margins narrowed on a sequential basis.

Net profit for the period grew by 53% from last year to ₹391.6 crore, from ₹255.2 crore last year.

At the end of the December quarter, Premier Energies had orders of 9.4 GW worth ₹13,700 crore, compared to 9.1 GW in the September period.

Nomura has maintained its "neutral" rating on Premier Energies with a price target of ₹1,190, stating that the EBITDA for the quarter was 7% below their estimates. Despite subdued order flow during the quarter, Premier Energies has a healthy order book, Nomura said.

At the current price, the stock trades at 9 times its financial year 2027 forward EBITDA, and 8 times for financial year 2028 with regards to the same metric.

On the flip side, UBS maintained its "buy" rating on Premier Energies with a price target of ₹1,340, but went on to add that sequentially soft results, and flat margins compared to Waaree Energies, could lead to some near-term pressure on the stock.

Price targets suggested by Nomura and UBS imply an upside potential of 60% and 80% for shares of Premier Energies respectively. UBS' price target is the highest on the street for the stock.

13 analysts have coverage on Premier Energies, of which seven have a "buy" rating, two say "hold", and four have a "sell" recommendation on the stock.

Shares of Premier Energies are down 4.3% in early trading on Friday at ₹708. The stock is down nearly 30% over the last 12 months.